The Many Faces of Foreclosure (and How You Can Help)

I just visited the former site of Casey Serin’s famous IAmFacingForeclosure blog and came across this link to a post by Dr. Housing Bubble about a seemingly improbable foreclosure story involving a couple that was once making $130,000 a year. I liked this quote in particular:

“Amazingly, folks are very upfront when they are making lots of money but go into clandestine mode when they are having financial difficulties.”

This is the reason why it may seem like the recent surge in foreclosures seems to be avoiding your neighborhood. People just don’t talk about entering foreclosure. But stories like the one in Dr. Housing Bubble’s post are everywhere, which creates a great opportunity for investors to not only find many potential deals (homeowners facing foreclosure are less likely to have the time and resources to list with a realtor), but more importantly to assist homeowners going through this very difficult process. Bankruptcy has never been desirable, but it’s becoming a less viable solution due to greater restrictions on bankruptcy, brought on by the recent subprime lending woes.

If a homeowner has enough equity in a property, real estate investors are in a very good position to help that person avoid bankruptcy. Time is on our side. Because investors actually purchase the property (as opposed to Realtors who simply list it for sale), we can complete a transaction within a few days, which is crucial when foreclosure is imminent and when each month’s missed payment leaves the owner in deeper financial troubles. These sellers are highly motivated, which makes them willing to sell the property at a deep discount or with favorable terms in order to sell quickly, making it worthwhile for an investor, who then sell the property for a quick flip profit or as part of a lucrative terms deal (perhaps with someone who just recently was foreclosed and can no longer apply for a conventional loan).

The key to working with pre-foreclosures is finding delinquent homeowners relatively early in the foreclosure process. There are a few ways to do this:

• Search the Notices of Default (NoD) at the county courthouse. This is the quickest way to find out about a homeowner’s pre-foreclosure status.
• Use a pay service like DataQuick, which takes a few days to process a Notice of Default, but allows you to search for notices of default from your computer.
• Try any online provider of pre-foreclosure information. You can probably find a site that lets you search Notices of Default for free, but there’s usually a lag of at least a week or two, so the best opportunities may already be gone.

When working with pre-foreclosure homeowners, be sensitive. This is a gutwrenching and unknown experience for most of them, and as mentioned earlier, many people don’t like talking about foreclosure. Be sure to convey credibility, trust and understanding through your branding materials and communication with the seller. Create a sense of hope and optimism, but be forthright and realistic about the situation and the options available to them. Stay away from the hard-sell tactics and never use their financial situation as a way to exploit them financially. Sure, it may cost you a few hundred dollars here and there, but it’s a minor financial difference and, as Wilford Brimley might say, “it’s the right thing to do, and it can help you live a better life“.

Hat Tip: www.IAmFacingForeclosure.com

Rehabbing: Keep It Minimal

Leo Babauta of Zen Habits has a great post today about creating a minimalist home. I love the idea because our thought process is so closely associated with our physical environment, and having a clear living space naturally leads to clearer thoughts. Leo is one of my favorite bloggers because he consistently produces high-quality, insightful posts, a feat that is harder than it may seem. Check out the article for his excellent justification of why to keep furniture and knick knacks to a minimum.

This reinforces one of the golden rules of rehabbing. For some reason, people have a tendency to attempt ambitious rehab projects when a more straightforward rehab would be preferable. Keep in mind, when people buy a house, they’re purchasing a lifestyle as much as they are a physical property. With the ever-increasing speed of our culture, people want simplicity. After years of touting the newest technological innovations and the “office away from home”, the hotel industry has been rebranding itself in recent years to once again focus on sleep and comfort. Solitude, peace and clarity are at a premium right now. Keep this in mind when considering additions to your next rehab project.

Be Passionate (and How To Fake It If You’re Not)

I’m currently reading Seth Godin’s Free Prize Inside! and this quote caught my eye.

“It’s my passionate belief that when teams of people get together and make something amazing, useful, helpful, productive, funny, inspiring or remarkable, we’re at our full potential as humans…

It’s important. It’s powerful and something that you need to do. Satisfied businesspeople (and nonbusinesspeople, for that matter) are happy because they’re actually doing something. They’re building and creating and designing and leading and shaping and making something come to life.”

This puts a new spin on advice that is echoed in almost every book on leadership and success that I’ve read lately (two standout ones are “The Power of Full Engagement” and “True North”). The advice: do what you love to do. It’s something that everyone’s heard, and an idea that is instantly likeable, but it’s odd how often this principle is forgotten. I know I forget it sometimes – usually right before my productivity goes down and I instantly find 100 other things to do.

Obviously, there will always be some undesirable tasks that need to be done, but I’m getting better at avoiding this unfortunate pattern (William James once said “Nothing is so fatiguing as the eternal hanging on of an unfinished task”), and I’ve concocted a few ways of making these obstacles a little less imposing:

1. Delegate, delegate, delegate. I’m just learning this, but you don’t need to have subordinates or direct reports in order to delegate your tasks. Others may be glad to learn a new skill or work on a higher-level project. Also, thanks to the wonders of diversity, there always seem to be people who enjoy unimaginably dull things (or at least can tolerate them more than you do). Trading tasks can be fun, too.

2. Reframe your idea. Framing is a means of putting an idea in a new light. Politicians are wonderful at this: tax relief (relieve me from the burdens of police protection, running water, paved roads, and representative government), death tax (as opposed to the more-accurate “estate tax”), pro-life, pro-choice. But it doesn’t have to be verbal. Think of yourself in a movie, or the CIA. Time yourself and try to break your personal record. Think about it differently to give it an interesting twist.

3. Flow. This is what marathon runners do to get their mind from thinking about physical aches and pains. Focus solely on the task so you stop dreaming about golfing in the Bahamas. Get into a rhythm. Start tapping beats with your pencil or nodding your head. If it doesn’t distract you (or if you want to be distracted), play good music. I recommend music with a solid, consistent beat that is either instrumental or has vocals that are low-key or highly familiar. For work that requires a lot of concentration, here are some of the things I listen to. For more physical or energy-driven work, try something that motivates you.

4. Create a system. Oftentimes, there is a barrier to becoming fully engaged in the task at hand because it is high pressure (i.e. you don’t want to miss anything), complicated, or woefully boring. Creating a system can do wonders in this situation. Design a checklist or make a flowchart of all the things you need to do, then knock the subtasks down one by one in machine-like fashion.

5. Reward yourself. If you can’t drum up any interest in the task at hand, then you’ll surely be interested in being done. Give yourself a reason to finish the task; it’s amazing what a bit of motivation can do. Take a jog, read your favorite blog, eat a carrot, learn about an obscure legal phrase. Whatever it takes, give yourself a pat on the back for a job well done.